It’s Final: UK Competition and Markets Authority Clears LN-Gaiety MCD Merger

Electric Picnic
Conal McSweeney
– Electric Picnic
The popular Irish festival is part of LN-Gaiety

Last month, the UK’s Competition and Markets Authority (CMA) provisionally cleared the acquisition of Irish promoter MCD Productions by LN-Gaiety.
Now, the CMA has followed up on its initial assessment that the acquisition by LN-Gaiety of MCD won’t result in a significant lessening of competition in the promotion of live music events in Ireland, including in Northern Ireland.
The CMA noted that Live Nation/Ticketmaster, which controls the vast majority of tickets sold in the market, would be able to foreclose Ireland’s other major promoter Aiken from the promotion of live music events.
However, the watchdog also concluded, that Live Nation/Ticketmaster did not have an incentive to do so. 
Here are the CMA’s most important conclusions on the ability to foreclose, followed by reasons it didn’t see an incentive to do so: 
– Live Nation/Ticketmaster has market power in the provision of Ticketing Services for Live Music Events, and Aiken could not easily switch all of its demand to alternatives in response to attempted foreclosure
– A reduction in Aiken’s ticket sales, or an increase in its costs, could reduce its effectiveness in competing against MCD 
– Live Nation/Ticketmaster would have the ability to engage in a total foreclosure strategy against Aiken after the end of Aiken’s contract with Ticketmaster, or sooner
– We have identified quality foreclosure mechanisms which Ticketmaster would potentially be able to employ, and which could have an impact on Aiken’s ticket sales
– We have also considered price foreclosure mechanisms. Ticketmaster would be able to offer Aiken poorer financial terms at the end of Aiken’s current contract if not sooner
– Taking the evidence in the round, we consider that Live Nation/Ticketmaster would be able to foreclose Aiken
Conclusion on incentives:
– The margins Ticketmaster is currently earning in providing ticketing services to Aiken, and the fact that Live Nation has (indirectly through Live Nation UK) approximately half of the shares in MCD, mean that MCD would have to win a high proportion of any business lost by Aiken in a foreclosure scenario in order for the foreclosure strategy to be profitable
 – There is a material risk to Ticketmaster that Aiken would switch its business outside live music events to a different provider in a foreclosure scenario
– In pursuing a foreclosure strategy, Ticketmaster would face the risk of Aiken switching some of its business to a different ticketing services provider, which could allow a rival to become established in Ireland on a substantial scale
The CMA’s full reasoning can be read here.